What S&P's U.S. Outlook Downgrade Means

Experts say it could lead to higher interest rates, which could be a drag on the economy.

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Currently, the Federal Reserve purchases about 70 percent of the total treasuries in circulation, Schnapp says. The Fed meets next week and is expected to hint at plans to end its QE2 program at the end of June. "If the Fed decides not to do any further QE2 and do a wait-and-see approach, they risk spikes in interest rates," Schnapp says.

Once a buyer as big as the Fed exits the market, economists say they're uncertain who's going to step in to fill that gap. Before QE2, the Fed only purchased about 10 percent of the total treasuries in circulation, while private domestic purchasers bought about 40 percent and foreigners purchased the other half, Schnapp says.

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